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The net profit of the natural resources development corporation (NRDCL), that supplies sand, stone and timber, dropped by almost half to Nu 7.8 million in 2016 from the previous year according to its annual report.

In 2015 its net profit was Nu.15.7 million. According to the report this was mainly because of the write off provision of stone stock amounting to Nu 3.691 million, impairment of assets like crushing pants amounting to Nu 3.9 million, a 10% provision for non-moving raw materials amounting to Nu 2.3 million and compensation paid for termination of stone quarry contract amounting to Nu 6.3 million.

But its gross block of assets increased to Nu 805.1millon million from Nu 713.4 million in 2015. Its total expenditure for 2016 was Nu 409.7 million, an increase by Nu 3.24 million from the previous year.

The company’s net worth increased by 2.03%, from Nu 580.3 million to Nu. 592.0 million, because of transfer undistributed net profit to reserves and surplus.

Revenue also increased by Nu 3.2 million in 2016 to Nu 431.6 million mainly due to increase in the sale of sand and stone. Total revenue from the sale of sand increased from Nu 55.0 million to Nu 69.3 million last year. Sales from the stone increased to Nu 15.2 million from Nu 9.8 million in 2015.

The financial report states that the company foresees overall cash outflow this year because of major increase in capital investment on account of purchase of logging machineries and establishment of joinery units. The report states that funds will be availed from financial institutions this year.

Another reason for cash outflow this year is from ongoing court cases on account of claim for compensation by contractors due to premature termination of quarry contracts 2015. “As the compensation amount payable to the contractor is not ascertained, the company has created a contingent liability amounting to Nu. 29.736 million,” the report states.

The NRDCL is engaged in the production and supply of timber, extraction and supply of sand, extraction and supply of stone and production and supply of stone chips from crushing plants and other subsidiary activities such as supply of woodchips, reforestation, forest road construction, production and supply of briquettes and firewood.